UnitedHealth loses up to 50% value from its historical maximums and what is even more impressive, the fall happened in just 30 days. In parallel, The head of UnitedHealth Group resigned and the firm suspended its forecasts by 2025.
The general director of Unitedhealth, Andrew Witty, will leave his position for personal reasons and the largest health insurer suspended his financial perspective for the whole year due to A higher medical costs than expected.
Witty joined the company in 2018 after about nine years as general director of the British pharmaceuticals Glaxosmithkline. He was appointed General Director of UnitedHealth in February 2021, replacing Dave Wichmann.
UnitedHealth became one of the country’s largest companies under Witty’s leadership. Total revenues exceeded 400,000 million last year, an increase of 55% from the 257,000 million that UnitedHealth generated the year before Witty became general director.
The actions of UnitedHealth shot under Witty’s leadership, rising 60.5% since he assumed the main position of the company.
However, in the last five months, that performance of the shares was drastically reversed, coinciding with The shock murder of the Brian Thompson company executive in front of a hotel in New York City at the end of last year.
UnitedHealth cut its forecast by 2025 last month after its first quarterly loss of profits in more than a decade. The actions of Unitedhealth, lost 38% since the mortal ambush of December 4 to Thompson in the center of Manhattan, fell more than 8% before opening the market on Tuesday.
Unitedhealth reported that he suspended his forecast by 2025, since the medical costs of many beneficiaries of Medicare Advantage new in Unitedhealthcare were higher than expected.
More than 50 million people have health insurance with UnitedHealth Group Inc. It also has a large pharmaceutical benefits administrator that manages the coverage of prescription drugs and an OPTum growing segment that offers attention and provides technical support.
UnitedHealthcare is the largest supplier of Medicare Advantage plans in the country, with more than 8 million customers. These are privately administered versions of the Federal Government’s coverage program, mainly for people 65 years of age or older.
The company is quoted in its lowest multiples of the last 10 years but UnitedHealth marked record income of $ 400 billion in 2024.
The qualifiers punished UnitedHealth
The actions of UnitedHealth Group suffered qualification sales by Bank of America and Raymond James.
“We have reduced UNH’s rating to market performance”Raymond James wrote, citing the combination of the “expected” change of executive director and the “unexpected” decision to abandon the forecasts just a month after reducing them.
Bofa reduced its target price for Unitedhealth to $ 350 from $ 560, citing both reduced profit estimates and a lower valuation multiple.
Raymond James He echoed these concerns, cutting his estimation of BPA by 2025 of 26.25 to $ 22 and qualifying the visibility for the rest of 2025 as “very low.”
The actions of UnitedHealth fell 18% on the day of the ad and dropped 38% so far this year. “In summary, it will spend time until the smoke is cleared,” Raymond James wrote.
Both firms indicated valuation compressions, with Bofa highlighting that the action now quotes approximately 14x the profits against its historical multiple of 19x.
Source: Ambito
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